In simple terms, equity financing is the raising of capital through the sale of shares in a business. It can used at many different stages of a business journey whether starting out or to finance a high-growth phase. Some of the key advantages of private equity are:
- Equity provides long-term finance with no interest charges although there may be a requirement to pay dividends from profits
- There is no sudden requirement to repay and no personal security to provide
- With relationships established your investors may provide further funding as you grow and expand or you may be able to raise further bank debt on the back of the equity provided by the investor
- Private investors may also bring with them new ideas, new skills and a fresh approach, giving a new lease of life to your business.
The process of seeking an individual investor in Jersey is often based on informal networking and personal introductions. Many professional advisors and finance providers have well established networks of individuals and companies that are interested in investing in new and established businesses.
As well as talking to your business advisor at Jersey Business, Envestors is also a company based in Jersey that is able to provide advice and support in preparing for and presenting to potential new investors. Visit www.envestors.co.uk for more information.
Other useful sources of information.